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BSQUARE Acquires Adobe Flash Technology Consulting and Distribution Business from NEC Corporation of America
    BSQUARE to Deliver Adobe Flash Lite Software to OEMs Worldwide

BELLEVUE, Wash.--(BUSINESS WIRE)--Dec. 19, 2007--BSQUARE (Nasdaq: BSQR) today announced that it has acquired NEC Corporation of America's Adobe(R) Flash(R) Technology Consulting and Distribution business for an undisclosed sum. As a result of the transaction, BSQUARE is now a worldwide authorized distributor of Adobe Flash Lite(TM) software, which supports Adobe Flash(R) Player functionality for mobile and embedded devices. A license is required for any mobile or embedded device that utilizes Flash Lite software. BSQUARE will license Flash Lite to OEMs building mobile and embedded devices and will also deliver Flash Lite porting, performance-optimization, testing and verification services. In addition, BSQUARE plans to feature Flash Lite on its DevKit hardware development platforms.

Flash Lite enables OEMs and operators to differentiate their devices with a custom user interface. It also gives end users the ability to access compelling web content such as YouTube videos. Adobe reports that more than 300 million Flash-enabled devices have shipped to date and predicts that over one billion Flash-enabled devices will be available by 2010. The BSQUARE acquisition includes distribution rights for Adobe Flash ports for popular hardware platforms from Broadcom(R), Freescale(TM), IBM(R), Intel(R), Marvell(R), NEC(R), NXP, RMI, and Texas Instruments. BSQUARE will also acquire NEC's installed Flash Lite customer base and NEC's Flash Lite product team.

"This acquisition broadens our product and service offerings in an area of particular interest to OEMs right now, given the increasing popularity of web content such as YouTube on mobile devices. Further, OEMs desire to build compelling user interfaces on devices utilizing Flash authoring tools," said Brian Crowley, president and CEO, BSQUARE. "Our engineering services team will performance-optimize Adobe Flash Lite for OEMs building mobile phones, set-top boxes, digital signs and other customer-facing devices. In addition, OEMs within the installed base of Flash customers will benefit from BSQUARE's experience and expertise as a distributor of Microsoft(R) Windows(R) embedded licenses. We expect the acquisition to be accretive in fiscal 2008."

"We anticipate solid growth in embedded sales as OEMs continue to offer more compelling user interfaces and end users demand the ability to view engaging Flash-enabled content," said Mike Bergeron, Vice President of Business Development at Adobe. "We are pleased to work with BSQUARE, a highly-regarded embedded device technology expert and distributor, to accelerate the adoption of Adobe Flash Lite in mobile and embedded devices."

About BSQUARE

BSQUARE is a software solution provider to the global embedded device community. Our teams are committed to delivering the highest quality, lowering project risk, and reducing time to market, and can collaborate with smart device makers at any stage of device development. For more information about BSQUARE, visit www.bsquare.com.

BSQUARE is a registered trademark of BSQUARE Corporation. All other product and company names herein may be trademarks of their respective owners.

This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to our future operations, future revenues, projected financial results and earnings per share. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Our forward-looking statements are only predictions and are not guarantees of future performance and are subject to substantial risks, uncertainties and assumptions that are difficult to predict and could cause actual results to differ materially from those projected. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. There are a number of important factors that could cause our actual results to differ materially from those indicated by such forward-looking statements which are described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2006 and in the Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2007. We undertake no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.


    CONTACT: BSQUARE Contact:
             BSQUARE
             Renee Higgs, Senior Marketing Manager, 425-519-5226
             or
             BSQUARE Investor Contact:
             Hayden Communications, Inc.
             Brett Maas, President, 646-536-7331
             brett@haydenir.com

    SOURCE: BSQUARE